The federal procurement landscape continues to shift and transform.
Two recent executive orders push the government contracting community further towards the plan for a comprehensive update of the Federal Acquisition Regulation – commonly referred to as FAR 2.0.
Last week (April 15 and 16), the Trump Administration released two Executive Orders aimed at modernizing and stream-lining the federal procurement process and prioritizing commercially available solutions. These Executive Orders tell us that change is coming, driven by the Administration’s on-going effort to inject increased efficiency and cost-savings into the system.
The Executive Orders can be accessed here –
Bottomline – the march towards FAR 2.0, coupled with the Executive Orders discussed in this post, marks a pivotal moment in the evolution of federal acquisition processes. Federal contractors must be ready to meet the moment and have the agility to traverse a transformed procurement environment.
Understanding FAR 2.0
The FAR has existed for more than 40 years as the primary set of rules establishing uniform procedures for acquisitions across the federal government. The Restoring Common Sense Executive Order makes the case that – over time – what was intended as a straightforward vision has “swelled . . . into an excessive and overcomplicated regulatory framework.”
FAR 2.0 is therefore presented as a strategic effort to revamp the existing regulatory framework based on the following principles:
- Elimination of Non-Essential Provisions: Mandating that the FAR includes only provisions that are (i) required by statute or (ii) necessary to support the simplicity, usability, and efficiency of the system (or protect economic and national security interests).
- Agency Alignment: Requiring agencies to ensure that any supplemental procurement regulations align with the streamlined FAR 2.0.
- Regulatory Sunset: Considering a provision that would result in non-statutory FAR provisions expiring after four years unless renewed.
Ensuring Commercial, Cost-Effective Solutions in Federal Contracts
In tandem with the push towards FAR 2.0, Ensuring Commercial, Cost-Effective Solutions focuses on leveraging commercially available products and services to enhance efficiency and reduce costs.
- Prioritizing Commercial Solutions: Mandating that agencies procure commercially available products and services, including those that can be modified to meet agency needs, to the maximum extent practicable.
- Contract Review: Requiring agency contracting officers to review all existing contracts for non-commercial goods or services within 60 days and submit waivers only to the extent an exemption is justified.
Key Takeaways for Federal Contractors
The shift towards FAR 2.0, supercharged by these Executive Orders, has to be on the radar for every government contractor.
Immediate steps can include reviewing existing contracts in anticipation of new processes.
What essential provisions are likely to remain?
How will your business capitalize on the removal of non-statutory provisions to increase cost margins and efficiency?
Contractors should also stay in touch with the changing landscape. That can include tracking updates from the Office of Federal Procurement Policy (OFPP) and the FAR Council, as well as maintaining routine touch points with federal agencies to understand how they are adapting.
Lastly, thinking long term, contractors should consider investments in the personnel and technology needed to manage FAR 2.0. Procurement team members will need the knowledge and skills to navigate the revised procurement processes. Internal procurement policies and procedures will need to be revised to align with the new FAR guidelines, and business technology will need to adapt and meet the demands of the push for increased efficiency and digitization.
What is your business doing to get ready?
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